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Compensation: Why It (Almost) Doesn’t Matter 97

part of your newly designed compensation plan won’t fly: some
element will be too clunky, too hard to understand or impracti-
cal to administer. For example, a cleverly calculated incentive
scheme may be so convoluted that no one is too sure just what
should be paid, to whom, and when.
Use a confidential feedback mechanism, like a blind survey,
to assess how the new plan is working. I recommend testing for
validity at three months, six months, one year, and three years
after implementation, then every three years thereafter.

Maximizing the Results from Your
Compensation Plan
How can you get the Ask the Right
biggest bang for your com- Questions
pensation buck? Let’s end Aim your surveys appro-
this chapter with a few priately.The initial surveys (at three
short tips on how to get and six months) will evaluate the base
pay and benefits and perhaps
the most retention value
(depending on the timing of their pay-
out of your carefully con-
ment) the incentives and perks.The
structed compensation annual survey will evaluate base pay,
package. benefits,incentives,bonuses,and
perks.The three-year survey will eval-
Communicate!
uate the effectiveness of all of the
There’s no point in having above plus deferred compensation.
the best compensation
plan in the business if no one knows about it! Your newly
designed package should be part of your recruitment literature
as well as broadcasted appropriately within the organization.
Don’t forget: top employees want recognition; your compensa-
tion package is one way of providing that recognition.
Show That Compensation Is Fair and Appropriate
It’s very important that the introduction of the new compensation
plan be accompanied by a detailed explanation, one on one, to
each of the employees affected by it, describing how the new plan
will work and why it’s fair and appropriate. You may wish to con-